Reddit is made out of people

But Steve Huffman doesn't seem to get it.

Some day, there’ll be a great business school case study on the Reddit clusterfuck that has been accumulating mass over the last few weeks, like a rolling Katamari Damacy of idiotic decisions. It’ll be written in the kind of dull anodyne prose that only an MBA student could love. Even so, the incredulous ‘and Steve Huffman did WHAT?’ will radiate from every paragraph. Reddit has created an asset that is about to become wildly valuable, without ever quite understanding what it was doing. Now Reddit’s CEO seems set on burning it all down. The Verge just reported that Reddit was removing moderators who have been pushing back against management. This is not going to work out well. Seeing like a Silicon Valley founder is increasingly a recipe for not actually being able to see the world at all.

In fairness, Reddit has major problems. The things that make it valuable – the wild proliferation of subreddits organized around nearly every topic that human beings could conceivably be interested in – are nearly impossible to separate from the things that make it toxic. As the rest of the Internet has been overgrown by SEO-optimizing bullshit-content kudzu, some subreddits have become rare places on the Internet where you can go to find good and useful information. Equally, human beings can be assholes, and when assholes clump together, the assholery begins to snowball.

The good and the bad run together because Reddit, more than most other parts of the Internet, is made out of people. It works on algorithms – but those algorithms are largely designed to support human value judgments, through upvoting, downvoting and moderation. Volunteer moderators play a crucial role in running subreddits. Even in the best of times, this makes Reddit difficult to reconcile with business priorities based on clear hierarchies and direct reports. Huffman – like Ellen Pao before him – is not a god-emperor. He’s more like one of those medieval kings who perpetually had to worry about squabbling barons who had the high justice and the low and paid little attention to the pronouncements of their liege. It’s no wonder that Huffman finds this frustrating and difficult – anyone would, and it doesn’t flow easily from the kinds of competences you’re taught in engineering school.

But it is just this reliance on humans that will make Reddit incredibly valuable over the next few years. For better or worse, Large Language Models (LLMs) are about to transform the Internet. They batten on vast corpuses of textual data, which they turn into weighted vectors, and then use to predict and generate text.  That allows them – for the moment – to spew out content that more or less approximates some common denominator of what people know. But this doesn’t mean that algorithms are more valuable than human knowledge. Plausibly, it is exactly the opposite.

LLMs’ value, which is real, involves summarizing and organizing human intelligence, rather than substituting for it.  Their dependence on organized human intelligence is only going to grow. LLMs produce text as well as analyzing it. As they begin to feed on text that they and their siblings have produced, their informational quality will rapidly degenerate. This means that the Internet as a whole is likely to become considerably less valuable over the next couple of years. The problem of SEO-optimized low quality content is going to become dramatically worse. As international relations scholars would describe it, we are moving into an offense dominant world where attack has a decided advantage over defense. It is going to be really easy to flood the zone with low quality content, but far harder to distinguish it at scale from the good stuff. The algorithms that pump stuff out seem more powerful than the algorithms that distinguish.

The point is that in such a world, places like Reddit will become much more valuable, because they are where human based systems can plausibly help get the good stuff produced. And in fairness to Huffman, he sort of recognizes this. The current crisis was precipitated by Huffman’s decision to start charging a lot more money for API access to Reddit, on the theory that Reddit’s data (which has been used to train LLMs) is worth much more money than Reddit has been charging. That drove developers of third party apps, which many Redditors rely on for access and automated tasks, out of the market. They can’t afford to use the APIs to get the data they need for the apps to work. And that, in turn, is why moderators got angry and started turning major subreddits dark.

But Huffman only sort of gets it, which is possibly much worse than not getting it at all. What Reddit has that is valuable is not data, which obsolesces rapidly, or even reliable information that can be turned into data. It’s the human social structures that produce this complex information, continuously, reasonably consistently and at a larger scale than pretty well anywhere else on the Internet. Those social structures – the relations among moderators and their communities – are the engine of Reddit’s commercial advantage. Humans produce the knowledge, and evaluate (with the help of algorithms) whether it seems right. And they do so thanks to a set of half-evolved, half-designed political structures that prevent Reddit from degenerating into fractious chaos or a wilderness of spam.

By disempowering the mods, Huffman is undermining the political relationships that Reddit relies on. He’s compared the striking moderators to “landed gentry,” and seems to hope that other more pliable moderators will magically spring out of nowhere to replace the people he’s kicking out. In the best case, his actions will seriously damage the social structures that make Reddit work. In the worst case, they may destroy these structures, hacking away the goose’s viscera in the hope that golden eggs will still magically get laid.

This is a critical post rather than a constructive one. I’m not the right person to explain how Reddit can be made profitable. What I am saying is that a principle of ‘first do no harm’ is a necessary first step on any journey to profitability. There are strong self-interested business reasons why third party apps ought to have cheap – or free – API access. They will support and enhance Reddit’s core value proposition over the coming years. So too, Reddit’s business leadership needs to cultivate good political relations with the barons, rather than organizing disastrous let-me-tell-you-how-it-is-going-to-be-masquerading-as-ask-me-anything sessions where people, reasonably, yell at the leadership. Instead of locking out the unpaid volunteers that Reddit needs, the management should be thinking about negotiating Magna Cartas.

There’s a larger lesson to be drawn from this. The Silicon Valley business model of economic development has been based on engineering skills – figuring out how to optimize processes with algorithms, rather than engaging in the tedious and unattractive negotiations required to manage messy political relationships among disputatious human beings. Optimizing tractable stuff has led to some spectacular successes, but the increasingly toxic side-effects are coming to swamp the benefits. Furthermore, even as algorithmic tools of knowledge management become ever more commodified, they rely on an increasingly narrow base of reliable human knowledge production. The plausible result is that the relative returns to engineering prowess are going to fall, while the relative returns to judiciously-applied political skills, aimed at improving the production of valuable knowledge, are going to increase, perhaps rapidly and precipitately.

That is not something that Silicon Valley is particularly well prepared for. The last couple of years has been a series of political turf wars between CEOs and senior management and fractious employed talent which doesn’t share their values or priorities. That’s one of the reasons that many CEOs – apparently including Huffman – were thrilled to see Elon Musk firing most of Twitter’s employees.

Treating Elon Musk – who increasingly seems never to have met a conspiracy theory that he didn’t like – as a role model doesn’t signal great leadership qualities in the world we’re entering into. Leaders who don’t understand the value of solid, useful information about how the world actually works, are unlikely to prosper as that information becomes more valuable. Increasingly, the marginal gains to knowledge production will come from improving human cooperation rather than trying to replace it with automated processes. In that world, the highest returns will go to those who are actually good at politics, and willing to work through the messy compromises, rather than hoping to starve the peasants and local functionaries out as Steve Huffman seems set on doing. This is very likely to be an exemplary disaster.